Chattels
Sorry for this dumb question . . .
If a self-employed trader sells his business (i.e. his assets and goodwill), assuming the assets are all sold for less than £6,000, are they all exempt from CGT? HMRC guidance seems to imply that the £6,000 applies to PERSONAL chattels and NON-WASTING chattels, but what about Plant & Machinery which has had capital allowances claimed?
This must be obvious as I can't find an answer to it anywhere, but could someone please decipher the HMRC view - I have read and reread Helpsheet 293, but it still doesn't seem clear.
"If capital allowances could have been claimed on the cost of the chattel, for
example, because it was used in a business, any gain on its disposal will not
be exempt."
Does this only apply where disposal is more than £6,000?
Thank you
Section 262 TCGA 1992
You're right, Jon: the Help Sheet isn't written as clearly as it might have been.
It would probaly have been clearer if they'd included the "Business Assets" text within Part 4 "Wasting Assets" rather than presenting it as a separate section. The exception for business plant and machinery applies only to the exemption for wasting chattels {Section 45 TCGA92}. It does not affect the general exemption for small value chattels given by Section 262.
No chargeable gain will arise on any individual items of plant and machinery sold for less than £6,000.
If capital allowances have been claimed, no allowable losses can arise either. Even if a loss would arise after imposing the restriction in S262, this would then have to be restricted further in respect of relief already given for the capital allowances {Section 41}.
David
s45 TCGA
P&M can be chattels because they are wasting assets and they are tangible moveable property.
However, assets that have been used in a trade, profession or vocation, and capital allowance have been claimed - or could have been claimed even if they were not claimed - do not fall within the chattels exemption.
By the way, the exemption applies to wasting chattels, not to non-wasting ones.